Stuttgart Muncipal Water Works not affiliated with recent mass mailing

Wednesday

Jul 24, 2013 at 2:35 PM

Stuttgart residents report contact from company offering water service line coverage

Leigh Hahn-Kreimeier @SDL_Leigh

After a rash of advertisements were mailed to Stuttgart residents about water line warranties, Stuttgart Municipal Waterworks is advising residents that they are no way associated with the company HomeServe.

“It has been brought to our attention that Homeserve has sent out a mass mailing in our area for emergency repair plans for your plumbing system. Stuttgart Municipal Water Works is not affiliated with this company in any way,” Stuttgart Municipal Waterworks Director Tommy Lawson added to the department’s website.

The same company reached out to citizens in Arkansas County in 2012 offering low premiums for coverage for the water service lines that connect a home to a utility’s main water pipe.

Stuttgart Mayor Marianne Maynard said in 2012 she had received several phone calls from city residents about the business, HomeServe out of Little Rock, trying to sell them water line warranties.

That led her to check with Arkansas Attorney General Dustin McDaniel’s office.

The low monthly premiums may sound appealing initially, but a closer look at coverage exclusions shows that homeowners are rarely covered for the common types of problems related to the water lines, McDaniel explained at the time.

Lawson said the department has seen the advertisement and has read the fine print, and he agrees with McDaniel. Lawson said the company would not pay for certain old plumbing and many other stipulations.

McDaniel issued an alert in 2012 so that Arkansans may know all the facts prior to purchasing water-line warranty coverage.

"Consumers invest in insurance and warranty policies for the peace of mind they receive by knowing they are protected in the event of a problem or emergency," McDaniel said. "This type of warranty product comes with too many stipulations and too little security for the consumer."

In fact, McDaniel said that water-service line coverage may already be included as part of a consumer's existing homeowners' insurance policy. Homeowners should consult their insurance policy or check with their insurance company for details. If such coverage is not already a part of the policy, it is possible that it could be added to the homeowner's policy for about the same or less cost than coverage offered separately.

HomeServe USA Corp. is not accredited with the Better Business Bureau (BBB). Businesses are under no obligation to seek BBB accreditation, and some businesses are not accredited because they have not sought BBB accreditation.

Between September 2012 and January 2013, BBB conducted a review of the print solicitations HomeServe USA mailed to consumers during the period starting July 2011 and ending January 2013. As of January 31 the company agreed to either modify copy or provide substantiation of certain ad claims.

Based on comments from recipients of the company's mailer that its featured logos give the impression that the company is government- or utility-sponsored, BBB requested that the logos be modified to make clear that HomeServe USA is an independent company, separate from local utilities and government. In response, HomeServe stated that it uses a service mark "sm" to denote that the logo is its property. The company also stated that, in some cases, it has filed for registered trademarks.

BBB also asked the company to include its headquarters address in all solicitations, to avoid any confusion among consumers about the actual company location. On December 12, 2012, HomeServe's legal counsel, William H. Hurd, advised BBB that the company had agreed to include the headquarters address in its solicitations.

In reviewing updated sample solicitations provided by HomeServe in April 2013, as well as, solicitations obtained from other sources, BBB noted that the advertising flyers did not incorporate the address clarification the company had agreed to include. BBB wrote to HomeServe about this issue on June 5 and June 20. On July 15 HomeServe's divisional counsel, GraceAnn Pisano, informed BBB that, although the company has not yet added the headquarters address to its solicitations, it intends to do so.